Russia and Ukraine war: Will it negatively impact Apple’s supply chain?

Russia and Ukraine war: Will it negatively impact Apple’s supply chain?

(Epitome credit: Getty Images)

Russian forces invaded Ukraine on Feb. 24, impelling residents to flee their homes and seek refuge in neighboring countries. The war galvanized nations and conglomerates to take castigating actions against Russia (e.g. economic sanctions). As such, tech pundits are discussing whether the conflict will exacerbate supply-chain issues.

The chip shortage is already hampering production in the tech industry, but the question is, will the Russia and Ukraine state of war inflame it? Some say that tech companies, including Apple tree, could face difficulties. Others say in that location’s nil to worry nearly.

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How the Russia and Ukraine conflict affects Apple and other tech companies

From AppleInsider’s perspective, Russia’s invasion could negatively affect Apple’south supply chain. After all, Russian federation is a major exporter of raw materials that are critical to the tech industry, including palladium, a metal used in sensors and memory cards.

iPhone 13 Pro Max

iPhone 13 Pro Max

(Image credit: Future)

A typical iPhone consists of 0.015 grams of palladium, according to the United states of america Gold Bureau. On a macro level, more a third of the U.S.’ palladium supply is from Russia. It doesn’t cease at that place. As of Dec 2020, Apple listed x Russia Federation-based refiners and smelters in its supply concatenation. They produce tungsten, tantalum and gold for the Cupertino-based tech giant, which tin can be constitute in Apple tree’south products.

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As a issue, AppleInsider surmised that the Ukraine and Russia state of war could increment cloth prices for Apple tree. In fact, co-ordinate to Reuters, the toll of aluminum already surged to tape highs afterwards several nations imposed sanctions on Russia (a major producer of aluminum).

Despite these troubling facts, some say that the Russian invasion will have fiddling to no impact on the tech industry’due south supply chain.

Chipmakers claim that Russia and Ukraine disharmonize isn’t a threat

Ukraine is major producer of neon gas, which is used in semiconductor manufacturing. According to AppleInsider, Ukraine’s neon gas is a byproduct of steel product in Russia. The afflicted nation supplies a whopping xc% of neon gas to U.S.’ semiconductor industry.

Chip manufacturing

(Image credit: Getty)

Notwithstanding, bit companies aren’t sweating information technology. They’re already one step alee, according to Bloomberg. They foresaw disaster when Russia annexed Crimea in 2014. Since then, semiconductor manufacturers diversified their suppliers.

“Nosotros practise not conceptualize any impact on our supply chain,” an Intel spokesperson told Bloomberg. “Our strategy of having a diverse, global supply chain minimizes our chance of potential local interruptions.”

GlobalFounderies Inc., the U.S.’ largest provider of outsourced chip manufacturing, concurred with Intel in a statement: “We practice not anticipate a direct risk. We are not totally immune to global shortages, just our footprint provides us with more insulation.”

Bloomberg Opinion Columnist Tae Kim isn’t convinced. “While some chipmakers are fortunate to have [neon gas] suppliers exterior the [warring] region, others are not,” he said. Kim added that while China and U.Due south. have facilities that manage neon gas production and purification, it will “take a long time” to run across demand if Ukraine-based suppliers are blocked.

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It’s too early on too tell whether the Ukraine and Russia conflict volition exacerbate the fleck shortage, but perchance both sides are correct. Some tech companies may, in fact, be affected by the state of war, especially if they didn’t prepare for this outcome by diversifying their suppliers. Those who saw this coming and took action, however, will exist insulated from the supply-concatenation mayhem.

Kimberly Gedeon, property a Master’south degree in International Journalism, launched her career as a journalist for MadameNoire’southward business beat in 2013. She loved translating stuffy stories well-nigh the economy, personal finance and investing into digestible, easy-to-empathize, entertaining stories for immature women of color. During her fourth dimension on the business beat, she discovered her passion for tech equally she dove into articles about tech entrepreneurship, the Consumer Electronics Prove (CES) and the latest tablets. After viii years of freelancing, dabbling in a myriad of beats, she’southward finally found a domicile at Laptop Magazine that accepts her as the crypto-addicted, virtual reality-loving, investing-focused, tech-fascinated nerd she is. Woot!